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Farming Industry (Bank Overdrafts)

Volume 33: debated on Thursday 2 December 1982

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asked the Minister of Agriculture, Fisheries and Food whether he has received any recent information concerning the level of bank overdrafts incurred by the farming industry.

The latest information relates to mid-August 1982, when total bank advances outstanding to agriculture and forestry in the United Kingdom were about £4¼ billion. Survey data show that borrowing amounts on average to no more than one-tenth of total assets per farm in England and Wales.

Will my right hon. Friend confirm that the considerable increases in productivity achieved by British farmers over the past five years have not happened out of thin air, but have been incurred at the expense of a trebled level of bank borrowing? Does my right hon. Friend agree that the increase this year in farm incomes is no more than is necessary to repay a small portion of those debts?

Yes, Sir. I am pleased to say that one of the results of the increase in farm incomes this year is that there are signs of considerable increases in investment in British agriculture, which will benefit the construction and machinery industries, which are very much in need of those orders.

I am sure that the Minister is well aware that all the political parties in the House are in favour of setting up a land bank to help young entrants. In view of the opinions expressed by people of all political shades, will the right hon. Gentleman consider bringing forward proposals to set up such a land bank?

That is not directly connected with the question, but there are plenty of facilities, including those of the Agricultural Mortgage Corporation, which can be of considerable assistance to people—including young people—who wish to inject capital into British agriculture.

Does my right hon. Friend agree that the figures show that the cost to the agricultural producer of producing extra food for the consumer has been considerable? Will he comment on the absurd and stupid story in the Daily Mail the other day, by Andrew Alexander, condemning the whole set-up of British agriculture and what it was doing for British consumers?

I disagree with many articles in newspapers, but I suppose that I disagreed with that article more than most. I can only comment that on the one occasion when Mr. Alexander started to practise politics instead of preaching it he lost his deposit.

The Minister might pay a little more attention to the chairman of the Agricultural Mortgage Corporation. Does he agree with him and his hon. Friend the Member for Holland with Boston (Mr. Body) that the British farmer is now receiving over 60 per cent. of his income from direct Government aid in one form or another? Is he aware that the level of indebtedness has trebled? Is that not an indictment of the common agricultural policy, which he has been trying to defend? Does that not mean that certain sections have done extremely well, but that most farmers have done badly under the Minister's administration and the CAP?

I look forward to the hon. Gentleman bringing forward proposals that will improve substantially the incomes of British farmers. We shall monitor the cost, because the last costs that the hon. Gentleman suggested were about £2 billion, added to which he wants to nationalise land, to have negative MCAs of 33 per cent. and to re-rate British agricultural land. That combination would be a disaster.